TMI Blog2014 (12) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... any change in the installed machinery or any part thereof is intimated to the Commissioner of Central Excise in terms of Rule 4(2) of the said Rules - In the light of the decision of the Supreme Court reported in [2011 (7) TMI 10 - SUPREME COURT OF INDIA] on remand, the competent authority has to determine the same. As a consequence, if duty, penalty and interest is leviable, the competent Authority is entitled to proceed further as provided under the relevant provisions of the Rules by following the procedure prescribed. It is needless to say that opportunity will be given to the assessee so as to avoid an allegation of violation of principles of natural justice. - Appeal disposed of. - Civil Miscellaneous Appeal Nos. 950 to 952 of 2007,3549 of 2005 and 748 to 751 of 2008 - - - Dated:- 11-12-2014 - R. Sudhakar And R. Karuppiah,JJ. For the Appellant : Mr. E. Vijay Anand For the Respondens : Mr. R. Gurumurthi for Mr. S. Venkatachalam - R1 R2 JUDGMENT (Delivered by R. Sudhakar,J.) Civil Miscellaneous Appeal Nos.950 to 952 of 2007 filed by the Revenue as against the order of the Customs, Excise and Service Tax Appellate Tribunal were admitted on the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Therefore there is nothing for this Court to answer the first substantial question of law as the Rule themselves provides answer. 4. With regard to the third substantial question of law, which was admitted on 16.4.2007, on which date the decision of the Punjab and Haryana High Court in the case of CCE, Chandigarh V. Doaba Steel Rolling Mills reported in 2002 (139) ELT 285 (P H) was pending before the Supreme Court, it is seen that the Supreme Court has given a finality to the issue by rendering a decision dated 06.07.2011 reported in 2011 (269) E.L.T. 298 (S.C.) settling the issue holding that Rule 5 of the HRSMACD Rules, 1997 would be attracted for determination of the annual capacity of production of the factory when any change in the installed machinery or any part thereof is intimated to the Commissioner of Central Excise in terms of Rule 4(2) of the said Rules. For better clarity, we extract the relevant portion of the findings of the Supreme Court hereunder: 23. We do not find any reason to depart from these well settled principles to be applied while interpreting a fiscal statute. Therefore, bearing in mind these principles and the intent and effect of the statutor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002 imposing penalty in the following manner: i) I impose a penalty of ₹ 1,22,80,577/- (Rupees One crore twenty two lakhs eight thousand five hundred and seventy seven only) against the assessee under Rule 96ZP(3) of Central Excise Rules, 1944. ii) The assessee are also liable to pay interest under Rule 96ZP(3) of Central Excise Rules, 1944, for the above said amount calculated for the relevant period. iii) The assessee shall pay the above mentioned penalty and interest amounts immediately. 9. Challenging all these orders, it appears appeals have been filed by the assessee before the Tribunal. 10. The Tribunal took up the appeal in Appeal No.E/1418/2004 relating to the six show cause notices issued prior to 1.2.2000 and came to the conclusion that these show cause notices were not passed based on any valid order of the Commissioner determining the ACP of assessee's factory and therefore the Tribunal set aside the demand of duty and allowed the appeal. The assessee has also challenged the consequential penalty order in Appeal No.E/1418/2004. The Tribunal set aside the order of penalty, since the appeal challenging the main issue was dismissed on the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the party in their letter dated 13.8.97 should be treated as the date from which the changed parameters of the mill would be applicable, for both the Tor Section Mills. Insofar as the subsequent change or parameters of the Tor Mill is concerned, the situation is different. We have already noted that no specific date of change of parameters of this Mill was discernible from the assessee's letters dated 15.10.98 and 27.7.00. The fact, which thus emerges, is that the assessee themselves did not specify any date for commencement of work of their Tor Mill with changed parameters. In such a situation, the dated (27.7.99) of the assessee's second letter, shall be treated as the effective date of change of parameters of the Tor Mill. In the order dated 1.2.2000, the Commissioner has rightly accepted this date. 12. In short, based on the decisions in the case of Sawanmal Shibumal Steel Rolling Mills Vs CCe Chandigarh - I, 2001 (127) ELT 46 (Tri.-LB) and CCE Chandigarh - I Vs. Doaba Steel Rolling Mills, 2002 (139) ELT 285 (P H), the Tribunal came to hold that Rule 5 will have no application and remanded the matter to the Original Authority to pass ACP orders for the entire pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pass an order based on the decision of the Punjab and Haryana High Court in the case of CCE, Chandigarh V. Doaba Steel Rolling Mills reported in 2002 (139) ELT 285 (P H). However, the Supreme Court, on appeal by the Revenue, clearly held that Rule 5 states that in case the annual capacity determined by the formula in sub-rule (3) of rule 3 in respect of a mill is less than the actual production of the mill during the financial year 1996-97, then the annual capacity so determined shall be deemed to be equal to the actual production of the mill during the financial year 1996-97. Hence Rule 5 will have to be taken into consideration for determination of the Annual Capacity Production even when there is any change in the installed machinery or any part thereof is intimated to the Commissioner of Central Excise in terms of Rule 4(2) of the said Rules. 15. For better clarity, the reasoning of the Supreme Court in paragraph 18 of the decision reads as follows: 18. As noted above, Section 3A was inserted in the Act to enable the Central Government to levy Excise duty on manufacture or production of certain notified goods on the basis of annual capacity of production to be determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be attracted for determination of the annual capacity of production of the factory when any change in the installed machinery or any part thereof is intimated to the Commissioner of Central Excise in terms of Rule 4(2) of the said Rules. We have already extracted the relevant portion, viz., paragraph 23, of the decision of the Supreme Court. At the risk of repetition, we again extract the same as follows: 23. We do not find any reason to depart from these well settled principles to be applied while interpreting a fiscal statute. Therefore, bearing in mind these principles and the intent and effect of the statutory provisions, analysed above, the conclusion becomes inevitable that Rule 5 of the 1997 Rules will be attracted for determination of the annual capacity of production of the factory when any change in the installed machinery or any part thereof is intimated to the Commissioner of Central Excise in terms of Rule 4(2) of the said Rules. 17. In the present case, the findings of the Tribunal that Rule 5 of the HRSMACD Rules will not apply is the core issue that has to be considered. In the light of the decision of the Supreme Court reported in 2011 (269) E.L.T. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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